China's Threats Are a Sign of Struggles at Home

Beijing's saber-rattling across the Taiwan Strait may well signify a coming conflict with Washington, but not necessarily over Taiwan. Beijing's threats to invade if Taiwan's presidential election on Saturday is won by Chen Shui-bian, who previously advocated a referendum on independence, have seen the Taipei stock exchange shed some 12 percent of its value in less than a week, and drawn a warning on Thursday from Defense Secretary William Cohen to tone down the rhetoric. Washington fears the threats from both sides could develop a momentum of their own, provoking a military showdown that would inevitably draw in the U.S. During the 1996 Taiwan election, Beijing fired missiles over an outlying island and the U.S. responded by sending a naval battle group into the strait. But for all the bluster and buildup of missiles on the coastline of Fujian province, however, China right now lacks the military means to mount an effective invasion  a naval force capable of rapidly deploying tens of thousands of troops on the island, and an air force capable of dominating the skies.

Beijing's amplified rhetoric over Taiwan may, in fact, be as much a reflection of shifts in Beijing's domestic politics as of developments in Taipei's presidential race. After all, military confrontation with Taiwan and the U.S. would be disastrous for China's economic reforms and the goal of attracting investment, and Beijing's reformists had hoped that their efforts, and the fact that Hong Kong has kept its economic system despite being ruled from the mainland, would coax Taipei toward reunification. But the slowdown of China's reforming economy over the past two years has raised the threat of massive unemployment and social instability, and that has led to a political resurgence of hard-liners grouped around National People's Congress chairman Li Peng, China's number two leader, who wants reforms slowed down rather than speeded up (as China's entry into the World Trade Organization would require). The fact that it was arch-reformist Premier Zhu Rongji who issued some of the strongest threats yet against Taiwan on Wednesday may be a sign of the growing conservative strength within China's leadership. And that could be bad news for the entire reform project.